2. Ampex Corporation entered into a three-year cross currency interest rate swap to receive U.S. dollars and pay

Swiss francs. Ampex, however, decided to unwind the swap after one year - thereby having two years left on the

settlement costs of unwinding the swap after one year. Repeat the calculations for unwinding, but assume that the

following rates now apply:

Assumptions:

Notional principal: $10,000,000

Original spot exchange rate, SFr./$ : .9850

New (1-year later) spot exchange rate, SFr./$ : 1.0475

New fixed US dollar interest : 4.20%

New fixed Swiss franc interest : 2.20%

Swap Rates:

Original: US dollar:

3- year bid 5.56%

3-year ask5.59%

Swap Rates:

Original: Swiss france:

3- year bid 1.93%

3- year ask 2.01%